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The power of advanced audit analytics
Bringing greater value to external audit processes
The time has come for external audits to embrace the use of analytics and technology. Analytics and data have transformed other industries from professional sports to retail to financial services and they will transform audits as well.
We are entering a period of wholesale transformation in auditing. The use of analytics for evidentiary and information benefits is only the beginning.
Transforming audit with analytics
As the surge of organizational and transactional data continues, conventional auditing approaches can’t keep up with the information influx. Increasingly, financial and operational transactions are moving online, expanding the array of variables to analyze, outliers to identify, and trends and patterns to make sense of. Advanced audit analytics capabilities bring greater value to external audit processes by supporting the analysis of large data sets and revealing more granular insights.
By enabling the analysis of entire sets of financial transactions, audit analytics aids in the interpretation and management of a growing storehouse of audit information. Audit analytics helps mine massive data sets to deliver smaller subsets of high-value data for the auditor to evaluate, improving both audit quality as well as the value of business insights an auditor is able to deliver.
As the role of the auditor becomes more strategic and insightful, audit professionals require enhanced skills, including strong capabilities and experience with data analytics. Firms that plan to move toward advanced audit analytics need to hire or develop staff with advanced analytical capabilities. Deloitte is actively hiring non-CPAs with expertise in data analytics to support the audit but also plans to evolve its training programs for CPAs to ensure all of our professionals are equipped to deliver the audit of the future.
Even as audits become more automated, human auditors will continue to play an important, if substantially different, role. Some will engage closely with advanced audit analytics and automation systems. Others will assess high-level outcomes of automated and semi-automated audit processes. And they will undoubtedly continue to deliver value by evaluating key assumptions, appropriately challenging conclusions with professional skepticism, and adding value to the overall financial reporting process.